I’m going to preface this post by saying, by no means am I insinuating that television would not have been successful without the National Football League. However, like the old tv commercial promoted cheddar cheese…It just made it better.
This year, the NFL, which in my opinion owns this world of entertainment, we just live in it, is breaking new ground once again. On October 25th, the game between the Buffalo Bills and the Jacksonville Jaguars will be played in London at Wembley Stadium. Something the league has been doing since 2007, is going to be streamed live over the internet for free on Yahoo.com!
This is unprecedented and also possibly threatening to a medium that helped create this monster that is the NFL, television. In turn, the NFL has give the television networks their highest ratings and highest revenue generating ad time in their history. This may mark the beginning to the end…But first, we must understand their beginning.
In 1959, a bright, young executive to the Los Angeles Rams (yes Los Angeles actually had a football team, two actually. Novel concept to give the 2nd largest media market a professional football team, isn’t it?) Pete Rozelle became the commissioner of the NFL. Keep in mind that back then there were two leagues, the NFL and the AFL (American Football League) which started in 1960.
Rozelle however was a great visionary. He saw how the future of the NFL would be tied to the rise of television, which was becoming America’s most important medium. Think about the 1960 Presidential debates…
Rozelle knew that football was perfect for tv. The single camera shot with a violent burst of action…perfect. Plus, with only a few seconds of excitement followed by brief periods of commentary fit nicely with the Amercian viewers short attention span.
But how do you monetize it?
The NFL owners made their money primarily from selling game tickets. The owners actually viewed TV as a threat because they felt increasing the television audience meant decreasing the game attendance!
Rozelle saw television as an opportunity though. It would not only grow the game by exposing it to those unable to attend, but it could also provide its own significant revenue stream by allowing the league to sell valuable broadcast rights and advertisements.
In 1961, Rozelle convinced the leagues owners and Congress, which had to approve a special exemption to antitrust law, to agree to a new revenue sharing plan that allowed the NFL to sell its league wide broadcast rights as a single package and then distribute the proceeds in equal shares to all the teams. Think about it, a team in New York City (Giants) and a team in Green Bay, Wisconsin (Packers) would both make the same amount of money. Seems absurd but genius at the same time. This also helped keep competitive balance equal.
After Rozelle secured the agreement of his revenue sharing-plan, with the assistance of late New York Giants owner Wellington “Duke” Mara (if you look at an official NFL football today, you will see the name “Duke” on it in his memory), Rozelle negotiated the NFL’s first league-wide TV deal. CBS paid $4.65 million a year for the rights to ’62 and ’63.
The NFL never looked back. In 2011, NBC,CBS, Fox and ESPN will pay the NFL $12.7 billion!!!
And now, the NFL may be cutting off its nose to spite its face…or is it?
Yahoo, has more than one billion monthly users between Yahoo, Yahoo Sports, Yahoo screen and Tumblr.
Marissa Mayer, president and CEO of Yahoo says: “It marks a significant change in the way users can access this amazing content. The NFL and Yahoo have both long engaged football fans around the world. Our partnership provides the ultimate football experience-with digital availability, designed for the modern fan”.
Now the current commissioner is the, now infamous, Roger Goodell. Goodell, like Rozelle, was hired by the owners of the now 32 league franchises. He has one goal, make the owners as much money as humanly possible.
“The NFL has always been committed to being at the forefront of media innovation. Through this partnership with Yahoo-one of the world’s most recognizable digital brands-we are taking another important step in that direction as we continue to closely monitor the rapidly evolving digital media landscape,” Goodell said in a statement.
How I read it…Thanks television, you’ve been a great wife for years, but I’ve met someone hotter and younger.
Think about this, according to Forbes Magazine:
CBS net worth: $30.4 Billion
ESPN Net worth: $ $16.2 Billion
Fox Net worth: $11.3 Billion
Apple: $145.3 Billion
Google: $65.6 Billion
The NFL’s current contracts are signed with NBC, (reportedly worth -$600 million as a network), Fox and CBS are set to expire in 2022, for about $3 billion a year annually…EACH! And ESPN’s deal is worth $1.9 billion a year until 2021.
HOWEVER! The NFL Network is currently simulcasting the Thursday night game with CBS. I will give you one guess who owns the NFL Network…what keeps them from selling those rights to, lets say…Google?
One thing digital programming offers more than broadcasting, they can track exactly who is watching it…On October 26th, you can bet a part of your anatomy those numbers are going to viewed unlike any numbers have been viewed before by the league office…
Do you think the NFL will tell TV, “It’s not you, its me.”?